Ingles Q2 Sees Net Sales Growth
Ingles Markets reported net sales for the second quarter ended March 24 of $881.7 million, an increase of $11.3 million, and net income of $6.5 million, compared with $7.7 million for year-ago period. For the first six months of fiscal 2012, net sales grew $56.8 million to $1.80 billion and net income rose 11.3 percent to $17.1 million, versus the first six months of fiscal 2011.
“We are pleased with our sales growth in the second quarter, especially since last year’s second quarter included a lot of inclement weather that resulted in higher sales for the prior year,” noted Robert P. Ingle II, CEO of Asheville, N.C.-based Ingles, which operates 203 stores in six southeastern states, as well as 71 shopping centers, all but 13 of which contain an Ingles supermarket. “Our grocery margins were stable compared with last year; however, our profitability was affected by lower gasoline margins compared with last year.
Added Ingle: “We remain committed to providing value to our customers by investing in improvements to our store base and our distribution system. Our new distribution center is scheduled to open next quarter, providing more long-term benefits to our company.”
The sales growth for the second quarter benefited from higher gasoline prices and more customer transactions than the second quarter of last year, and was offset partially by more favorable weather in 2012 than the prior year, according to the company. Second quarter 2011 included a large number of snow days that resulted in customers spending more time at home for meals. Excluding gasoline, grocery-segment comparable-store sales were essentially flat (a 0.1 percent dip) compared with last year. The number of customer transactions (excluding gasoline) edged up 0.7 percent, while the comparable average transaction size fell 0.8 percent compared with the same quarter last year.
Gross profit for the March 2012 quarter decreased 1.1 percent to $192.4 million, versus $194.6 million for the year-ago period. Gross profit, as a percentage of sales, was 21.8 percent for the March 2012 quarter compared with 22.4 percent last year. Gross profit contributed by gas sales was lower because of a spike in gasoline prices compared with the second quarter of last year, according to Ingles. Excluding gasoline sales, grocery-segment gross profit as a percentage of sales was level at 25.9 percent for the quarter ended March 24, compared with 26.0 percent for the year-ago period.
Net sales rose $56.8 million to $1.80 billion for the six months ended March 24, 2012, from $1.74 billion last year. Excluding gas, where retail prices were considerably higher than the March 2011 six-month period, grocery-segment comps increased 1.6 percent. The number of customer transactions (excluding gas) grew 1.4 percent, while the comparable average transaction size increased 0.3 percent from the March 2011 six-month period.
Gross profit for the six months ended March 24 increased 1.6 percent, to $394.2 million, a $6.1 million rise compared with the year-ago period. Gross profit, as a percentage of sales, was 21.9 percent for the March 2012 six-month period versus 22.3 percent last year. Ingles attributed the difference to an increase in gross profit dollars due to higher sales volume and inflationary effects on certain products. Excluding gas sales, grocery-segment gross profit as a percentage of sales rose to 25.7 percent for the six months ended March 24, compared with 25.6 percent for the year-ago period.
Net income came to $17.1 million for the six-month period ended March 24, versus $15.4 million last year. Net income, as a percentage of sales, was 1.0 percent for the six months ended March 24 and 0.9 percent for the six months ended March 26.
Capital expenditures for the March 2012 six-month period totaled $103.5 million, compared with $42.9 million last year. Ingles attributed the increase to the construction of the new distribution center slated to open later in its fiscal year. Cap ex for the entire fiscal year is expected to be about $160 million, Ingles said, including such projects as the new DC, store improvements and stores scheduled to open in fiscal 2013.